As stocks open higher, the USDCAD moves lower
The US st toocks - especially the Nasdaq - moved higher in the early New York trading, the USD moved lower, and currencies like the CAD moved higher.
The USDCAD dropped away from its 100 and 200 hour moving averages at the 1.3568-69 area. The price had been trading above and below that moving average in the London morning session, but moved below the MAs and stay below over the last few hours. The rise in stocks and move out of the USD into "risk" currencies, push the price to new session lows. The low has reached 1.3535 so far today.
The next target area comes in at the 1.35185-235 area. That area is made up of lows from July 6 and July 7. On July 8 the price broke below that level and tested/broke the 200 day MA briefly. On July 9 (Thursday) the price corrected to the level and stalled before later in the day breaking back above and rallying strongly.
Stay below the 100 and 200 hour moving averages now will have traders looking toward that swing area followed by the 200 day moving average at 1.35032. Admittedly, the 200 day moving average was broken both on Wednesday and Thursday of last week, only to have the break fail. However, if the price is to go lower in the pair, getting and staying below the 200 day moving average would be a key development.
Taking a broader look at the daily chart, the price of the pair has been consolidating -up and down - over the last 5 or 6 weeks. During that time, the price has closed above the 200 day moving average each day (since June 11). That increases the levels importance going forward.
